What to do with provident savings when you are reaching your retirement
Everybody knows investing is a lifelong process, no matter what stages of life you are in. Either you are a first income earner or someone who is reaching retirement. Someone once said, “You can be young without money but you can’t be old without it.” Thus, many companies have set up provident fund as a long-term saving for their employees in order to support them to maintain their living standards after retirement.
In general, employees who are in early years of working normally choose higher risk appetite as their investment policy. By having an idea that there will be a long time for their capital to grow so they can invest more aggressively. Also, the longer they invest, the lower the risk will be.
On the other hand, as employees get older the less risk tolerance they will be. Employees have to restructure their investment portfolios to be more conservative by specify the investment policy that match their objectives. Especially when one is reaching his or her retirement, he/she has to decide whether to hold the position in provident fund or withdraw the money.
Principal Asset Management utterly understands the need of fund members (Employees). Thus, Principal Asset Management wishes to propose “Principal Target Date Retirement Fund” which designed to provide appropriate investment plan for employees.
“Principal Target Date Retirement Fund” is designed to adjust member’s portfolio automatically each year and suitable for the fund members who do not have time to study and invest by themselves. The portfolio will be managed closely by fund manager. The portfolio’s asset allocation and risk will be adjusted to suit the member’s age. This will help fund members to have an appropriate level of investment risk throughout their investment life and emphasizes asset diversification. Thus, the fund can generate returns as well as reduce investment risk in portfolio.
The investment policies are categorized into 6 categories by specifying investment policy which suits each employee’s stage of life, from first income earner to retirement. To start investing, employees simply set their preferred retirement age. Then, the fund manager will automatically arrange the appropriate investment policy and asset allocation to suit the member’s age and also suitable for current market situation by using portfolio rebalancing technique.
For those who are moving closely to retirement or already retired, one important thing you must be aware when withdrawing all your money from provident fund is that there is a high possibility that the money will be spent on something you are not prepare for. For example, buying a new home, new car, traveling or even giving the money to grandchildren. This will increase the risk of not having enough income for retirement.
In fact, employees can also continue to invest in provident fund in order to invest the money to generate returns for continued growth even when they reach their retirement. In addition, to prevent money from being misused.
“Principal Target Date Retirement Fund” is also designed to provide appropriate investment plan for retired employees with TD_P investment policy. The portfolio’s asset allocation and risk will be adjusted to suit the employees’ age as the fund will decrease the portion of risky assets investment e.g., stocks and switch to invest more in fixed income to help maintain initial investment and to have an appropriate level of investment risk. Moreover, the members are able to withdraw money from the provident fund in installments for their daily expenses to ensure that members are able to retire properly with their intended retirement goals.
Principal Asset Management has extensive experience in pension management in a variety of countries including United States, Latin America, Hong Kong and Malaysia. Also, over 15 years and 5 years of experience in managing target date funds in the United States and Thailand respectively with asset under management over 64,943,898,351 Million THB and 893 employers. Whereas Principal Target Date Retirement Fund has asset under management over 8,434,711,047 Million THB and 263 employers (as of November 30th 2020) (source : 'Best Pooled Fund' on the competition year 2019 from Association of Provident Funds (AOP) on February 21th 2020).
In addition, " Principal Target Date Retirement Fund "also won the award for Pooled Fund under 10 billion baht for 3 consecutive years which assures that every single baht from the fund members is well taken care of. Provident fund members can conveniently access their balance, switch their portfolios from both website and application anywhere and anytime.
Find more information https://www.principal.th/en/provident-fund
Principal Asset Management Co., Ltd
Address: 44 CIMB THAI Bank Building, 16th Floor Langsuan Road, Lumpini Pathumwan, Bangkok 10330 – Thailand
Website: https://www.principal.th/
Phone: +(662) 686 9595
Email: clientservice@principal.th
Facebook: https://www.facebook.com/principalthailand
LINE: https://lin.ee/C6KFF6E หรือ @principalthailand
YouTube: https://www.youtube.com/channel/UCqELMp69UteyKgtWo4JuBqg
